Electric scooters are invading. Bird’s CEO leads the charge

An unusual email landed in the inbox of San
Francisco Supervisor Aaron Peskin last week. It was from a constituent
who’d broken his toe. Along with a photo of his bloody appendage, the
sender explained how the accident happened: He’d tripped over a scooter
left in the middle of the sidewalk.

This
wasn’t your regular kid’s push scooter. It was a 20-plus-pound
motorized electric scooter, one of hundreds that have flooded San
Francisco’s streets in the last month.

“I am getting all kinds of complaints,” says Peskin, who wrote legislation that would require scooter companies to get an operating permit. “They range from people having to dodge them as they go 15 miles an hour down the sidewalks illegally to people tripping over them to businesses upset that they’re [blocking storefronts].”

In what some are calling Scootergeddon, three companies unloaded
their dockless, rentable e-scooters across San Francisco during the same
week at the end of March. Almost instantly, dozens of scooters were
blocking sidewalks at bus stops, train stations and shopping areas.
First-time riders, dinging a small bell attached to the handlebars,
snaked in and around pedestrians and cars in a 47-square-mile city
already overwhelmed with Uber and Lyft drivers.

The three
companies — Bird, Lime and Spin — say they’re solving a “last-mile”
transportation problem, giving commuters an easy and convenient way to
zip around the city while helping ease street congestion and smog. They
call it the latest in a long line of disruptive businesses that aim to
change the way we live. And they’ve convinced investors they’re onto
something, having raised about $255 million among them.

But two California cities who’ve been invaded — Santa Monica and now
San Francisco — say the companies launched their fleets without first
getting explicit permission to scatter the e-scooters on public streets.
And, they argue, most riders aren’t following the laws of the road, are
endangering pedestrians and are leaving the scooters wherever they feel
like it — blocking sidewalks, parking spots, bike racks and wheelchair
accesses.

While “the MO of tech has been disrupt,” says
Peskin, “the corporate arrogance that has come with these venture
capital funded tech firms is rather extraordinary.”

Bird and Spin, as you might expect, see it differently. (LimeBike didn’t respond to a request for comment.)

“Our
mission is really to help reduce car trips, traffic and carbon
emissions,” says Travis VanderZanden, CEO and founder of Bird Rides, the
first company in the US to offer dockless electric scooters. “We think
Bird is having a very positive impact in the cities we’re operating in.”

Bird, Lime and Spin’s approach of “it’s better to beg for forgiveness
than to ask for permission” comes directly from the Silicon Valley
playbook. It’s what Uber and Lyft did as they rolled out their
ride-hailing services before being slapped with cease and desist orders
for not first getting permits. It’s what Airbnb did with its short-term
home rental service, which got it temporarily banned in New York, Berlin
and other cities, by allowing landlords to post multiple apartments on
the site.

“San Franciscans’ safety and public resources are
not commodities for these companies to monetize,” says San Francisco
City Attorney Dennis Herrera, who sent the scooter companies cease and
desist letters on April 16. “San Francisco has had enough of the mantra
‘move fast and break things.'”

The early Bird catches the worm

Bird’s new headquarters in Los Angeles is a block off from Venice’s posh Abbot Kinney Boulevard — a shopping strip GQ called “the coolest block in America.” Housed in the former Vice Media office, the industrial space features high white walls, vaulted ceilings and chatty young people sitting behind computers. The outside of the building has a minimalistic mural of an angelic-looking surfer. It’s tech bro meets Venice Beach hip.

VanderZanden, an affable,
baby-faced 39-year-old with gelled light-brown hair and a short beard,
tells me Bird’s office had been at the local WeWork until a few weeks
ago, when it outgrew that space. Bird beta-launched its first scooters
in Santa Monica on September 1 and has since grown from five employees
to more than 100.

More than 1 million rides have been taken on its scooters. Bird now has thousands of scooters in its fleet and is on the streets of seven US cities: Santa Monica, Venice, San Diego, San Jose, San Francisco, Austin, and Washington, DC. VanderZanden boasts there’s usually a Bird within a five-minute walk in any of those places.

The startup has raised $118 million in investment funding, including
one round for $100 million. It’s also gotten money from famed angel
investor Ron Conway, according to VanderZanden. Conway, an infamous
figure in San Francisco politics who’s also known for throwing his
weight around to help tech companies, didn’t respond to a request for
comment.

VanderZanden is no stranger to the on-demand world — or controversy. He founded on-demand car washing startup Cherry, which was then acquired by Lyft in 2013. With the acquisition, he became Lyft’s chief operating officer. He was poached by Uber the following year, causing a scandal when Lyft sued him for allegedly pilfering confidential information. The two sides settled the lawsuit in 2016.

VanderZanden
says he’s been fascinated with transportation since he was a kid in
Wisconsin, where his mom was a bus driver. He’d watch people struggle to
figure out how to cover the last mile from the bus stop to work or
home.

“I realized there’s a huge opportunity and really a void
in the market,” VanderZanden says. “And so, we got really excited to
use short-range electric vehicles to try to solve the last mile
problem.”

Why electric scooters and not bicycles?

“I
think bikes are dead now except for racing and exercising,”
VanderZanden says. “Most people when they’re commuting from point A to
point B, they don’t want to sweat and pedal.”

But you can pedal bikes to make them go. Electric vehicles need their batteries charged. VanderZanden says Bird has devised an unusual way to keep the scooters charged without having to pay for extra labor or electricity. It’s created an app that shows all of its scooters with low or dead batteries.

Anyone with a car and driver’s license can sign up for the app and
become a Bird charger. The drivers roam the streets, picking up Birds
and take them home to be charged. Bird pays them $6 per scooter. It
takes four to five hours to charge each one. Lime and Spin also use this
same charging system, paying $12 and $5, respectively, per scooter.

“We
have everything from riders that’ll do a few of them per night to
father-son teams where a father’s trying to teach his son to be an
entrepreneur,” VanderZanden says. “They pick up 20, 30 of these Birds
per night.”

Theoretically, all scooters are supposed to be off
city streets by nightfall when it’s illegal to ride them. VanderZanden
says they’re gathered up by 9 p.m. and back on the streets in the
morning.

“It creates this amazing kind of gig economy, where
the chargers are excited because they’re part of the electric vehicle
movement helping because they know Bird is having a positive impact on
the world,” VanderZanden explains. “It’s kind of like a game of Pokemon
Go for them, where they go around and try to find and gobble up as many
Birds as they can.”

No one could tell me if those
hard-charging entrepreneurs are actually making money — after you
factor in pick-up and drop-off time and other costs like gas and
electricity.

The e-scooter guinea pig

San
Francisco is typically the guinea pig for startups trying out their
products in the wild. But with these e-scooters, Santa Monica was the
first test lab.

As in San Francisco, Bird’s scooters popped up
on city streets practically overnight in September. Within weeks,
people were cruising down the beach boardwalk, weaving between throngs
of pedestrians.

Local officials quickly noted that riders were violating several state laws.

In California, riders of motorized scooters must wear a helmet, be over 18, have a driver’s license, obey traffic laws and stay off sidewalks. The law also says there can’t be more than one rider on a scooter. Other laws forbid the dumping of objects on city streets and the blocking of sidewalks, driveways and wheelchair ramps.

Santa Monica officials allege that Bird flooded the streets with its
scooters without city approval. VanderZanden did send a LinkedIn message
shortly before launch to Santa Monica Mayor Ted Winterer, and the mayor
quickly replied saying he’d meet with him. But that meeting didn’t
happen and Bird put out its scooters anyway.

“Anytime there’s
new innovation there tends to be a gray area,” VanderZanden says.
“Because of this gray area, there weren’t regulations that made sense
specifically for us.”

The city of Santa Monica didn’t agree
and warned Bird to comply with the law and get a business license. Bird,
they say, disregarded their warning. So in December, the City
Attorney’s Office filed a complaint spelling out nine criminal counts
against the startup.

“Criminal prosecution is not the first remedy to be used in regulatory cases,” Deputy City Attorney Eda Suh said at the time. “But Bird’s flagrant violations of city laws threaten public safety and require prosecution.”

By February, Bird had entered into a plea agreement and pledged to pay more than $300,000 in fines and secure the proper permits. The company also agreed to run a public safety campaign.

After the brouhaha, Bird also throttled its scooter speeds from 22 mph to 15 mph and began offering people free helmets. It updated its app and put a sticker on all of its scooters listing key safety rules, such as license required and no double riding. And the company created a Save our Sidewalks pledge, which it sent to the CEOs of other scooter and e-bike companies (none of whom have signed it yet). The pledge says companies agree to pick up all their scooters every night and to keep vehicles off the street if they aren’t being used at least three times a day.

“We’ve seen a little bit of improvement on helmets,” since the plea agreement, says Santa Monica Deputy City Manager Anuj Gupta. “We’ve seen maybe the most improvement on sidewalks.”

Still, a lot of riders aren’t following the law. One person without a
helmet was seriously injured in January after colliding with a car.
Since the start of 2018, the Santa Monica Police Department says it’s
made 694 traffic stops on e-scooters and issued 328 citations.

“We
realize all modes of transportation can be dangerous,” VanderZanden
counters. “Whether you’re on a bike or a pedestrian, you should also
wear a helmet if you’re by cars because cars can be dangerous.”

His real goal, though, is to get as many cars off the street as possible.

“The mission of Bird is to remove cars from the road and ultimately make roads a safer place,” VanderZanden said.

The San Francisco battle rages

Before
Bird, Lime and Spin spread their e-scooters across San Francisco, they
made half-hearted attempts to talk to city officials, authorities say.
But as with Santa Monica, the companies launched without a heads-up.

Several days after the scooters hit the streets, the San Francisco Municipal Transportation Agency sent letters to the trio with a warning: Regulations were coming. “We will not tolerate any business model that results in obstruction of the public right of way or poses a safety hazard,” SFMTA Director of Transportation Edward Reiskin wrote.

By that point, Bird had already hired three lobbyists, according to
the San Francisco Ethics Commission. But after the warning, the company
also added a banner message to its app for people to click and send the
Board of Supervisors a message saying they support Bird scooters.

“We’re
basically enabling the riders to help spread the love,” VanderZanden
says. “We think it’s very important that the city hears all sides of the
story and that there’s a public debate that happens before — like any
good democracy should — regulations come into play.”

Peskin’s legislation was passed unanimously by the Board of Supervisors on Tuesday. But before the permitting process begins, the law needs one more vote by the Supervisors. The SFMTA’s board also has to approve the requirements and conditions of the permits; that board discussion is expected to happen May 1.

Opposing legislation has been introduced in California’s State Assembly. This law aims to get rid of the helmet requirement and allow e-scooters to go on sidewalks and cruise at speeds of up to 20 mph.

As the laws are being hashed out, San Francisco city agencies are trying to deal with the influx of scooters.

The department of public works is impounding scooters left on sidewalks. Off the shelf, these kinds of vehicles cost around $500. A spokeswoman for the department says inspectors are looking for scooters that block pedestrians’ ability to travel. As of April 19, inspectors had confiscated 286 scooters from the three companies. To get all of those vehicles back, each company has to pay the city fines of about $3,000.

The police department, for its part, says
officers are cracking down on riders. “Safety measures may include
citations or warnings, in order to educate scooter users about the
regulations and public safety steps they should follow for their
well-being and that of others,” says Officer Giselle Linnane,
spokeswoman for the San Francisco Police Department.

And, finally, City Attorney Herrera sent the three companies cease and desist letters on April 16, saying their “current business practices create a public nuisance and are unlawful.” Herrera ordered Bird, Lime and Spin to submit a written report by April 30 about steps they’re taking to obey the law.

“We are working quickly to address the productive recommendations
outlined, and are taking necessary actions to comply,” says Poon, Spin’s
president. “We are committed to working with the city on the upcoming
permit process to ensure scooters are operated safely in our hometown of
San Francisco.”

As Peskin hopes his legislation will avoid
future bloody broken toes, all three companies continue to operate in
San Francisco — even with the cease and desist order and the scooters
being locked up. People, some with good balance, others not so much, are
still zipping down the street with the wind in their hair and hopping
onto sidewalks.

“We try to do everything we can to educate
them,” VanderZanden says. But, “it’s ultimately up to the riders to
follow the rules.”